Track 04Module 4 of 68 sources
Reading filings and catching bad accounting
Read an annual report efficiently and recognise the common ways earnings are flattered.
Key ideas
- Read the cash flow statement first. Profit that never turns into cash is the oldest warning sign.
- Watch receivables and inventory growing faster than sales, capitalised costs, frequent one-off items and changes of auditor.
- Related-party transactions and pledged promoter shares deserve extra attention in India.
- Management's discussion tells you what they want you to think. The notes tell you what happened.
Start hereWatch or read these first. They carry the core idea.
3. How to read the annual report of a company
Video · Zerodha Varsity · 6:02
How to read an Indian annual report in six minutes.
Valuation Tools Webcast: Reading a 10K
Video · Aswath Damodaran · 43:27
How to read a US annual filing, from a valuation professor.
Course
Varsity Module 3: Fundamental Analysis
Zerodha Varsity
The full written course on fundamental analysis with Indian examples.
Tool
Screener.in: Indian company financials and screens
Screener
Ten years of financials for every listed Indian company, with custom screens.
CoreThe standard references. Work through them once the idea is clear.
Book
Complete Guide to Fundamental Analysis of Stocks
Playlist · Zerodha Varsity · 10 lessons
The same course as ten videos.
Data
Data
Practice
For one company you own, compare ten years of cumulative net profit with cumulative operating cash flow. Explain any large gap.
See it live
Where this leads
04.1 · Investing and ValuationValuation and what the price already expectsBuild a simple discounted cash flow, then turn it around to read the expectations in today's price.04.5 · Investing and ValuationInvesting in India: sectors, data and where to lookBuild a working research kit for Indian equities and understand what drives each major sector.